The SEC said Friday that Citigroup Inc. and eight rival Wall Street firms had selected independent consultants as part of a $1.4-billion settlement over biased stock research.
The consultants will obtain analysts' reports from independent research firms that don't offer investment banking or brokerage services, and distribute them to clients. The settlement, approved by a federal judge last month, requires the firms to pay $432.5 million to give their clients independent research.
The deal, which was announced in April and called for hiring the consultants, settled charges that the 10 firms misled investors with biased research that was slanted to attract investment-banking clients.
The SEC said the consultants are former Wall Street analyst Stanley Morten for Citigroup; Asia Pacific Fund Inc. Chairman Michael J. Downey for Bear Stearns & Co.; Federated Investors Inc. chief investment officer Henry A. Frantzen for Goldman Sachs Group Inc.; former New York Board of Trade President Mark Fichtel for Lehman Bros. Holdings Inc.
Others hired include University of Minnesota advisor Thomas Brakke, for U.S. Bancorp Piper Jaffray; Patricia Chadwick, founder and president of Ravengate Partners, for Credit Suisse First Boston; former acting SEC Chairwoman Laura Unger for J.P. Morgan Chase & Co.; Michael Dritz, a former chief executive of Smith Newcourt Inc., for UBS; and Bridget Macaskill, a former OppenheimerFunds Inc. chairwoman, for Merrill Lynch & Co.
Morgan Stanley, the 10th firm in the settlement, dismissed its independent consultant, Todd Conover, this month after regulators' complaints about his work.